On Wednesday, the share price of LVMH shrank after its annual result turned only slightly beyond forecasts, casting doubt over a recovery in the luxury sector.
The company behind brands like Louis Vuitton, Moët & Chandon, and Hennessy reported EUR 84.68 billion ($88.27 billion) in revenue for 2024, showing only 1% growth compared to last year and marginally surpassing EUR 84.38 billion estimates by LSEG analysts.
By 9:02 AM in London, LVMH shares had fallen by 6.42%. Similarly, shares of other luxury goods companies, Kering and Christian Dior, declined by 6.65% and 5.71%, respectively.
After Richemont, the owner of Cartier, reported its record-high quarterly sales from the festive shopping period, investors have been looking for further signs of a recovery in the luxury sector. This highlighted continued pressure within LVMH after sales in its critical business of fashion, leather goods, wines, and spirits have receded.
LVMH credited its revenue growth to strong demand within a handful of its retailing divisions, including retailer Sephora and perfume and cosmetics. Consumers in the U.S., Europe, and Japan drove growth, while the figure shown among the Asia-Pacific, specifically China, exhibited sluggishness.
The French Luxury company was seen as a pillar for the entire industry, and, in recent years, it has faced a considerable setback due to waning sales in China and challenges in macroeconomics.
Meanwhile, LVMH has experienced a notable 14% increase in its share value so far this year. The company, earlier this month, surpassed Novo Nordisk, a Danish pharmaceutical giant, to become Europe’s most valuable company once again.
